Digital Garage, Inc.
3Q of FYE March 31, 2023 Financial Report＜2020-2025 Mid-term Plan＞

Designing our New Normal Context

2023.02.10

< Purpose >Designing “New Context” fora sustainable society with technology

Copyright © 2023 Digital Garage, Inc. All Rights Reserved2Introduction / CEO message
This year, we continue to drive forward our Fintech Shiftstrategy we announced last year, formulated based ona mid-term perspective and taking a cross-segmental approach among our four business segments. Taking an
ambidextrous approach, we diligently promoted and fast-tracked our business.
Following the capital and business alliance with Toshiba TEC and Resona Holdings, we launched a new business with JCB
and also received more investment from them, strengthening the capital and business alliance we entered into last year.
We are making great progress in our strategic alliances with major players in the respective industries. Furthermore,
within the DG Group, new fintech services with media businesses as “Tabelog” and ”Kakaku.com” are in the pipeline. In
the web3/crypto domain, B2B crypto currency trading services and NFT related businesses are on the way. DG Fintech
Shiftstrategy is progressing at a high speed.

From a global perspective, "payment orchestration”, the technology layer to automate and integrate various payment
networks, could become an opportunity. We continue to seek new strategic alliances with various global players, with aview to ”deploy new technologies for a sustainable society". We will further specify and announce our mid-term businessstrategy.
This quarter, our current business is making progress and remains solid, despite of an unexpected impact on ourinvestment business caused by the global economic situation. In order to further accelerate next-generation businesses,
we have established the Incubation Division, an organization specialized to create these new businesses.（Please also
refer to our latest announcement on our corporate officer structure for the next fiscal year.）Investment Highlights

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

4

FY23.3 3Q Cumulative Financial Results Highlights
Financial Performance
・Consolidated revenue and profit before tax decreased due to the absence of fair value gain/loss of Blockstream that had
been recorded in 2Q.
・Profit before tax excluding gains/losses on investments and one-time revenue grew to 3.5 B JPY (+19% YoY)
- FT: The transaction volume increased by 19% and profit before tax for 3Q (Oct.-Dec.) increased by 20% with steady growth.
- MT: Profit before tax for 3Q (Oct.-Dec.) increased by 2.3 times and grew significantly, and also the profit for 3Q cumulative
turned to plus YoY.
- LTI: Kakaku.com’s performance recovered and, additionally 2.7 B JPY was recorded as a profit from the sales of shares ofassociates.

Topics The B2B payment service, ”DGFT Invoice Card Payment”, now accepts Visa and Mastercard® brands in addition to JCB.
 Launched "Invoice Card Payment", a service exclusively for cardholders issued by JCB (in addition, JCB acquired
additional shares in the Company, thereby strengthening the capital and business alliance).
 Launched ”Quick Money”, a financing service for SMBs, enabling prompt financing according to business conditions,
utilizing sales forecasting AI models.
 Announced the addition of property survey functions to “Musubell”, the real estate digital transformation platform,
successfully expanding its business as one of the largest services in the industry.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

5Highlight 1 - Consolidated Revenue, Consolidated Profit before tax
・Profit before tax excluding gain/loss from investment in FT/MT/LTI grew by 3.1％ and performed steadily.
・Consolidated revenue and profit before tax excluding one-time revenue ※1 grew by 19.2% YoY.

Consolidated Revenue
52,88828,674

Consolidated Profit before tax（Unit：M JPY）

33,67910,38828,711IT segment+
Others/Adjustments andEliminations

22,333

9,401

8,728

9,361
IT Segment+Unrealized gains/losses of BS ※2 recorded
In Others/Adjustments and Eliminations+3.1%

One-timerevenueLTI
MT 11,065

9,549

One-time revenue ※1+19.2%
5,348

FT

6,471

7,273

（Unit ：M JPY）

8,005

8,774

FY20.3 3Q Cum. FY21.3 3Q Cum. FY22.3 3Q Cum. FY23.3 3Q Cum.
※1 One-time revenue：Profit from the sales of stocks of the group company etc.
※2 BS stands for “Blockstream Corporation Inc.”

2,512

2,935

3,498

FY20.3 3Q Cum. FY21.3 3Q Cum. FY22.3 3Q Cum. FY23.3 3Q Cum.

-11,858
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

6

Highlight 2 - Profit before tax by Segment
・FT grew steadily by 20% YoY, and MT increased by 2.3 times, showing an upward trend.
・IT decreased due to the reactionary decrease in fair value gains/losses of Blockstream, and LTI increased significantly thanks
to profit from the sales of shares of associates（M JPY）

FY22.3
3Q Cum.

FY23.3
3Q Cum.

YoY
Increase/Decrease

Profit before
tax

33,679-11,858-45,537

FT
MT
IT

3,492
588
20,116

3,947
728-9,743+455+139-29,858

YoY% Change

Remarks-135.2%In spite of the reactionary decline in fair value gains/losses ofBlockstream in 2Q, each business segment (FT/MT/LTI) grew steadily.

+13.0%

Transaction volume in both non-face-to-face and face-to-face grew steadily.
Profit before tax in 3Q (Oct.-Dec.) increased by 20%. The cumulative totalalso increased, achieving double-digit growth.

+23.7%

Profit before tax for 3Q (Oct.-Dec.) increased by 2.3 times the cumulative
total also turned to plus from the previous quarter. Profit rate was improved
due to solid accumulation in the financial sector, profitability review etc.

-148.4%

Portfolio was stable though profit before tax decreased due to thesignificant impact of the reactionary decline of fair value gains/losses ofBlocksttream in 2Q.

LTI

1,891

4,837

+2,946+155.8%

LTI business grew steadily as demand for food services recovered.
Also, profit before tax increased by 2.5 times YoY as a profit from the salesof shares of associates was recorded,

Others/AdjustmentsandEliminations

7,591-11,628-19,219-

Recorded valuation gains/losses on Blockstream securities held directly by
the company in 2Q.

(Musubell business was reclassified from MT to LTI Segment from this quarter. Results from the same period of the previous fiscal year were retroactively revied to reflect the change.)
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

7

Highlight 3 - KPI・Strategic alliances with various companies in the area of a face-to-face settlement worked successfully, resulting in continued
growth of settlement transaction volume.
・Investment profit on equity method from Kakaku.com, Inc. increased as the restaurant industry recovered. Digital ads are steady,especially in the financial sector.
Segment

Unit

FY22.3
3Q Cum

FY22.3
3Q CumYoY

Increase/Decrease

YoY% Change

100 M
JPY

32,76338,926+6,164+18.8%

Non-Face-to-Face

100 M
JPY

25,83829,317+3,480+13.5%

Face-to-Face

100 M
JPY

6,925

9,609

+2,684+38.8%

Digital Ads Volume

M JPY

22,27323,129

+856

+3.8%

M JPY

13,056

14,434+1,378+10.6%

Investment Value

M JPY

66,69972,193+5,494-

Amount Sold

M JPY

3,741

2,185

-1,556-

Amount Invested

M JPY

5,805

2,255

-3,550-Investment profit on equity methodfrom Kakaku.com

M JPY

2,153

2,652

+499

+23.2 %

KPI

Transaction Volume

FT

MT

IT

LTI

Financial

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

8Quarterly Revenue Trends（excluding IT segment and Others/Adjustments and Eliminations ）・FT continues to grow with the expansion of the cashless payment market.
・In MT, digital ads, mainly in the financial sector, remain solid despite the impact of COVID and seasonality.
・LTI's restaurant-related businesses, including Kakaku.com’s Tabelog, has recovered from the impact of COVID.
One-time & Discountinued operation(LTI)

LTI

MT

（Unit：M JPY）

FT

10,258

8,705
7,691

7,884

1,351

8,071
7,633
1,256
1,389

1,244

3,376

6,970

3,984

3,705

993

1,357

906

907

6,766
1,406

994

7,521
1,146

3,618

6,893

6,926
1,429

1,246

1,181

2,927

2,848

2,953

3,335

3,257

2,958

3,499

3,217

3,098

3,087

2,409

2,525

2,392

2,516

2,675

2,814

2,757

2,721

2,898

3,155

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

2,083

2,204

2,184

2,138

2,340

1Q

2Q

3Q

4Q

1Q

FY20.3

6,767

6,476
460

4,311

7,306

7,129

FY21.3

FY22.3

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

9

DG FinTech Shift

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

10

DG FinTech Shift Strategy Overview
Ⅰ Business expansion utilizing the payment platform/Driving DG FinTech Shift strategy for further growth
Ⅱ Social implementation of next-generation technologies/ Creating new businesses in areas that will
emerge non-linearly from technologies such as blockchain
web3/Crypto
relatedbusiness

Strategic joint
ventureNew platform utilizing a blockchain

MarketingDX business

FintechFinancialbusiness(DG invoice card payment)

Payment platform
Investment/Incubation
Payment platform(Quick Money)(Tabelog order)

Expanding the portfolio of strategic businesses around the
Fintech area, which creates a competitive edge andcontributes to the growth of the payment business

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

11

Multi-layered revenue streams centered around payment
Aiming to become a platform that continuously generates stable revenue streams centered aroundthe payment business. In addition to primary and secondary revenue streams, aiming to create newrevenue opportunities, mainly utilizing data.
＜DG Revenue streams＞
Payment recurringbusiness

Primary revenue
streamPayment platform

DX businesses

Secondary revenue
streamPayment

Customer behavior
data – from awarenessto transaction
Attracting
customers

Marketing/DX businessDX /Cashless• Industry-specific DX service revenue• Marketing and CRM service revenues

Consumer• PSP (Payment Service Provider)service revenues

Businessowners(Merchant)• PSP service revenues

Data businessNew revenue stream

Fintech business• New financial services revenues• Next generation marketing• PSP service revenues

Payment/
Purchase data
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

12Initiatives to Accelerate “DG FinTech Shift” Strategy
Aiming to promote and accelerate DG FinTech shift strategy by co-creating businesses with strategic
partners utilizing their assets＜ Partner companies＞＜ Co-creative businesses/initiatives＞(Tabelog order)• Payment methods expansion/sales reinforcement• Payment service for the specific industries• Initiatives for security enhancement① Payment platform② Marketing/DX
business

POS data/
Nationwide network ofsales/maintenance

Solid customer base/Merchant’s network• Industry specialized DX/E-Commerce services• Retail media utilizing data
• Digital advertising in the post-cookie era
TBD③ Fintech Financial
business

Solid SMB customer
base/Bank services(DGFT Invoice Card Payment)• B2B financial services(Quick Money)• Credit scoring model utilizing data
• Financial/payment services utilizing blockchain

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

13

Expansion of New B2B Payment / Fintech Service ①
・ DGFT Invoice Card Payment, launched in November 2022, which practically extends payment due dates by switching invoice
payments from bank transfers to credit card payments, became the first in Japan to accept all three major credit card brands (JCB,
Visa, and Mastercard).
・Launched "Invoice Card Payment", a service exclusively for cardholders※1 issued by JCB (in addition, JCB acquired additional
shares in the company, thereby strengthening the capital and business alliance)

Point 1

(DGFT Invoice Card Payment)

Domestic B2B market is approximately 100 trillion JPY whichis three times of the B2C market※２

Point 2

Sellercompanies③ Advanced
payment

B2B payment services are expected to grow due to increasein digitization of B2B transactions as a result of regulatorychanges such as the qualified invoice system

Point 3
Starting here from this service, develop more B2B fintech
services and make it a core business in the medium term
※1 Members of cards issued by JCB and JCB Group card issuers※2 “e-Commerce Market Survey”, Ministry of Economy, Trade and Industry※3 Plan to expand the card brands①Issue invoices

Buyer
companies④Withdrawal②Credit card
Payments
Payment process
Money transfer

2022 Nov
Dec
2023 Feb※3

・Launched DGFT Invoice Card Payment
・Accept Visa and Mastercard
・Launched ”Invoice Card Payment”,
a service exclusively for cardholders
issued by JCB.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

14

Expansion of New Payment/Fintech Service for B2B ②
Ⅰ

Launched "Quick Money," an easy-to-apply online financing service for our payment merchants.
DG Lab's proprietary sales forecasting AI model predicts the future payments received by merchants.

Ⅱ

Continuously developing new Fintech services partners by utilizing various data, AI and other technologies.

Ⅰ

Merchants can use the service for unexpected cashneeds – application to financing could be as fast as 5
business days and the entire process completes online.

Ⅱ

Developing new payment / fintech services withResona Holdings, who we started a capital andbusiness alliance with in November 2022.

(Quick Money)①Financing③Deposit the payment amounttaking off the repayment
amount for the financing

Merchants②Receive Payment

Credit cardcompanies, etc.

Flow of financing

Flow of repayment

Payment/Fintech services
for specific verticals

Payment/Fintech services
for SMBs

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

15

Progress of DG FinTech Shift ①
NEW
NewBusiness2023 FebNEW
New
Business

Jan

NEW

Launched “Invoice Card Payment”, a service exclusively for cardholders issued by JCB(JCB acquired additional shares in the company)
Launched(Quick Money)B2B payment service,addition to JCB,a quick financing service for SMBs
, now accepts Visa/Mastercard® brands in

NewBusiness2022 Dec

Alliance

Nov

Signed a capital and business alliance agreement with Resona Holdings

New
Business

Oct

Launched a B2B payment service

New
BusinessJul

Launched a B2B payment service

New Business

Mar

Launched business of online ordering service
JCB Co., Ltd./Toshiba Tec Corporation

Alliance

Feb

Capital and business alliance with JCB Co., Ltd., a long-term leading partner in the paymentbusiness(DGFT Invoice Card Payment)(DGFT Invoice Card Payment)(Tabelog order)

together with JCB
together with JCB
in collaboration with

※NEW: Updated in FY23.3 3Q
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

16Progress of DG FinTech Shift ②
Capital and business alliance with Toshiba Tec Corporation, which had already collaborated
to establish JVAlliance

Dec 2021

Alliance

Oct

At the same time as a capital and business alliance with Nomura Holdings, Inc., a businessalliance with a group company in the custody businessNewbusiness

Sep

Launched an electronic contract centralized management service
to support the real estate industry’s digital transformation

Organization

Sep

Acquired India’s financial system development company (DG FutureTech India) as a new
financial hub

Newbusiness

Jun

Strategic subsidiary Crypto Garage registered as Japan’s first B2B-only
crypto asset exchange service provider

Organization

Feb

Announced group strategy ofMerged two payment related subsidiaries into

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

17Segment Performance Review

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

18

Overview of Business Segments
The Four Segments that make uplaunched last year

FINANCIAL TECHNOLOGY SEGMENT
Provides a diversity of comprehensive payment platforms as one of Japan’s largest
payment system providers supporting social infrastructure
MARKETING TECHNOLOGY SEGMENT
Develops comprehensive digital marketing solutions and data marketing businesses
utilizing various data
INCUBATION TECHNOLOGY SEGMENT
Invests in, incubates, and collaborates with entrepreneurs and startups mainly intechnology and Fintech sectors
LONG-TERM INCUBATION SEGMENT
Nurtures new businesses through long-term and continuous incubation

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

19Segment

Segment Overview

Performance

FY22.3 3Q Cum.

FY23.3 3Q Cum.

YoY Inc./Dec.

YoY % Chg.

Segment Revenue

8,005 M JPY

8,774 M JPY+769 M JPY+9.6 %

Segment Profit before tax

3,492 M JPY

3,947 M JPY+455 M JPY+13.0 %Note) Revenue is external revenue. Profit before tax is before intersegment eliminations➤DG Financial Technology Inc.

Japan's leading payment service provider

Major Group Companies/
Businesses➤ NaviPlus Co., Ltd,

Subsidiary of DG Financial Technology, Inc. Provides SaaS business for value-added
services for EC, such as recommendation and search engines➤ Scudetto Corporation

Provides fraud detection/prevention solutions, marketing solutions, etc.

➤ TD Payment Corporation（49％ stake／equity method）

JV with Toshiba Tec Corporation. Deploys multi-payment solutions for POS systems➤ ANA Digital Gate, Inc.（49％ stake／equity method）

JV with All Nippon Airways Trading Co., Ltd. Develops and provides new payment
solutions using Fintech➤ SCORE Co., Ltd. （49％ stake／equity method）

JV with Nissen Co., Ltd. Develops post-payment settlement business and various
financial businesses utilizing settlement data
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

20Segment Performance（3Q Cumulative ）Segment

・Revenue continued to grow with 9.6% YoY and profit before tax increased by 13.0% YoY.
・Business performance remained strong with steady growth in transaction volume in both non-face-to-face and face-to-facesettlements.

・Segment Revenue
EC/DX business
PSP business

7,273
6,471

618

8,005
678

Segment Profit before tax（Unit：M JPY）

（Unit：M JPY）

YoY

YoY

8,774

+9.6%

725

+7.0%

8,048

+9.8%

584

5,888

6,655

7,327

FY20.3 3Q Cum. FY21.3 3Q Cum. FY22.3 3Q Cum. FY23.3 3Q Cum.

3,303

3,242

3,492

3,947

+13.0%

FY20.3 3Q Cum. FY21.3 3Q Cum. FY22.3 3Q Cum. FY23.3 3Q Cum.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

21Quarterly Segment Performance

Segment

・Quarterly revenues remained strong due to increased settlement transaction volume.
・3Q (Oct. – Dec.) revenue and profit before tax grew by 12.1% and 20.1% YoY respectively, achieving
a double-digit growth.
（Unit：M JPY）

YoY

EC/DX business
PSP business
Segment Revenue
2,083

194
1,889

2,204

198
2,006

2,340

2,184

2,138

192

192

1,992

202
2,138

2,409

204
2,205

2,525

213
2,312

2,392

219
2,173

2,516

225
2,291

2,675

225
2,450

2,814

2,898

2,757

228

2,721

234

238

2,586

2,524

2,483

3,155

+12.1%

250

+9.5%

2,906

+12.4%

238

2,660

1,946

Segment Profit before tax

1,061

1,112

1Q

2Q

1,129
746

3Q

FY20.3

4Q

1,018

1,083

1,141

1Q

2Q

3Q

FY21.3

875

4Q

1,108

1,120

1Q

2Q

1,264

3Q

FY22.3

1,057

1,121

4Q

1Q

1,309

2Q

1,517 +20.1%

3Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

22Trends in Settlement Transaction Volume

Segment

・Face-to-face settlement continues to grow at a high rate, and market penetration continues to expand steadily.
・Non-face-to-face settlement remains strong despite a rebound in COVID demand.
（Unit：100 M JPY）

YoY

12,133Face-to-face settlement
Non-face-to-face settlement

10,545
9,768

6,278
485

6,660
534

5,793

6,126

1Q

2Q

7,281

8,124

8,333

692

1,091

8,962

1,794

1,476

1,688

10,482
1,960

10,1482,746

12,36812,424

2,902

3,123

11,5852,549

14,135+16.5%

3,584+30.5%

10,550+12.4%

2,219

586

6,695

3Q

FY20.3

7,432

7,242

7,486

4Q

1Q

2Q

8,752

3Q

FY21.3

8,080

8,522

4Q

1Q

7,929

2Q

9,387

3Q

FY22.3

9,036

9,466

9,301

4Q

1Q

2Q

3Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

23Trends in Number of Settlement Transaction

Segment

・The number of settlement transactions especially in face-to-face settlement continued to grow by 20.2% YoY.
・Data volume of settlement transactions continued to grow, expanding Fintech Financial business base.
（Unit：M Transactions）

YoY
256

+20.2%

104+43.0%

146

152

+8.5%

2Q

3Q

242
Face-to-face settlement
Non-face-to-face settlement
170
148
130

78
4
75

1Q

90
4

96
5

108
13

26

85

90

95

104

2Q

3Q

4Q

1Q

FY20.3

42

36

112

2Q

167
44

181
54

197
64

127

123

127

133

3Q

4Q

1Q

2Q

FY.21.3

213

211

222

73

75

86

140

136

135

3Q

4Q

1Q

FY22.395

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

24Segment

Transaction Volume Analysis of Increase/Decrease by Sector

・Travel, amusement, and food service-related transactions recovered as corona restrictions were relaxed.
・Thanks to successful alliance strategy in the face-to-face settlement, transaction volume in general retailers
such as supermarkets and drugstores increased.
（Unit：100 M JPY）※% compared to FY22.3 3Q Cumulative

GeneralRetail+36.3%

Food &
Public Fund Beverage+16.3%
Eating Out +18.9%
Amusement +83.8%
Facility+58.1%

Hobby+12.7%＆Other

38,926

Travel+114.5%32,763

FY22.3 3Q Cum.

FY23.3 3Q Cum.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved25Transaction Volume by Sector

Segment

・Travel and entertainment facilities in the service sector recovered, driving settlement transaction volume.
・Partner sales through alliance strategies were successful in the merchandising sector, and transactions
expanded mainly in retail.
（Unit：100 M JPY）

14,135

12,133
10,545

10,482
9,768

8,124
6,278

6,660

8,333

12,368YoY+16.5%+14.9%

12,424

11,585

10,148

8,962

+7.9%

7,281

OthersMerchandising+27.3%
Services

1Q

2Q

3Q

FY20.3

4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

26

Segment

Transaction Volume by Sector - Merchandising

・The alliance strategy worked successfully in the merchandising sector, and the transaction volume of general retailers increased.
・Home appliances and furniture increased from the reactionary decline from the special demand for stay-at-home consumption, and theshare of fashion products handled continued to expand.

General retail

FashionHome Appliances and Furniture Interiors
Stay-at-home
special demand

Growing
industries

Reactionary
declineIncreasing share withalliance strategy

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY20.3

FY21.3

FY22.3

FY23.31Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY20.3

FY21.3

FY22.3

FY23.31Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY20.3

FY21.3

FY22.3

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved27

Transaction Volume by Sector - Services

Segment

・Service-related settlement transaction volume grew recently due to the recovery from COVID in travel and entertainment facilities.
・Travel-related business is expected to see further recovery in existing clients due to the easing of travel restrictions and the start of nationwide travel
support.

Settlement Transaction Volume in Services

State of Emergency
Declaration
4/23-6/21

State of Emergency
Declaration
4/7－5/25

State of Emergency
Declaration
1/7－3/21

Measures to Prevent
the Spread of disease
1/7-3/21

State of Emergency
Declaration
7/12-9/30

YoY
Amusement+27.0%
Facilities/
Ticket Stores
Travel

1Q

2Q

3Q

FY20.3

4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q+61.2%

3Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved28

Inbound-related Settlement

Segment

・ Inbound-related settlements, which had highly contributed to business performance, remained low compared to pre-COVID
level.
・ Large potential for future recovery and expansion following the re-increase of the number of visitor arrivals to Japan.

Face-to-Face Settlement Transaction Volume

Number of Visitor Arrivals to Japan

Our inbound-related settlements have a larger potential forrecovery than pre-COVID

43

Over 300 B JPY per year

35

Inbound-related QR code settlement

17

Other face-to-face settlement

Government Goals

31

for 2030

22

60 M Visitors

15
21（Unit：100 M JPY）

23

2019
Visitor Arrivals

24

17

to Japan

13

306
1Q

287

292

2Q

3Q

FY20.3

FT’s Potential Transacion
Volume of Inbound-related Settelemt

31.88M

159

2021

0.24M visitors
4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q
FY23.33Q

Source) “Visitor Arrivals to Japan", Japan National Tourism Organization
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

29

Segment

Expansion through Alliance Strategy

Collaborate with the alliance companies to develop products to match needs of various types ofmerchants.
Face-to-Face Settlement Market
Accelerate the provision of multi-payment solution/systems forlarge-scale stores with Toshiba Tec, the domestic top sharecompany providing POS systems and our capital alliance partner.
Established JV (TD Payment) to propel the business

Large

Merchant size

Provide multi-payment solutions/systems together through JV withANA Group. Mainly continue to capture consumption of shops andrestaurants in airports, travel industry and tourists to Japan

AirPAY

Recruit
Provide a QR code payment solution for AirPAY operated by
Recruit Co., Ltd.

14 big players
of QR payments

Small

Operate DG product of Cloud Pay. Introducing to small-scale
stores as an MPM-type payment which is a consortium-type multiQR solutions that integrate various QR code payments into one QR
code※MPM (Merchant Presented Mode): Method in which consumers scan QR codes displayed at stores with their smartphones to make payments
Copyright © 2022 Digital Garage, Inc. All Rights Reserved

30Increasing Share with Alliance Strategy

Segment

Alliance strategy in a face-to-face settlement worked successfully, continuing high growth insettlement transaction volume in each area.
Face-to-Face Settlement Transaction Volume（Unit：100 M JPY）

9,609
3,584
3,123

３ Year CAGR
81.6%
2,219
1,794

2,746

2,902
2,549

Size ofMerchants(3Q Cum.)

Large+36.4%

Small to Mid+50.5%

Small+17.4%

YoY

1,960
1,688

1,476
1,091

1,605
485

534

586

1Q

2Q

3Q

FY20.3

692

4Q

1Q

2Q

3Q

FY21.3

4Q

1Q

2Q

3Q

FY22.3

4Q

1Q

2Q

3Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved31Segment

New System Strategy Associated with Business Integration of Two
Major Payment Companies

・As a government-designated critical infrastructure operator, thoroughly investing in stable operation andsecurity 24 hours a day, 365 days a year.
・Strengthen system to minimize downtime risk due to unforeseen failures, etc.

Strengthen systems

Expanding operation center• Japan's first introduction of state-of-the-art technology
used in highly public areas such as finance andtransportation as a regular payment system• Expanding hubs to respond to the increase andcomplexity of operations in anticipation of future growth inpayment transaction volume• Non-disruptive system operation with two-way real-time
replication/redundant database in active configuration• Thoroughly improve the reliability of the disaster recovery
systemData center

・Real-time replication
・Active configuration• Minimize manned response 24 hours a day, 365 days ayear by introducing technologies such as RPA (Robotic
Process Automation)
Operation center2 hubs structure

ORACLEEXADATA

Monitoring center
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

32Capital Expenditures and Depreciation

Segment

・Continues to invest in systems to ensure stable 24/365 operation and improve robustness of security.
・Depreciation is expected to normalize around year 2025 with efficiency gains from system integration.
（Unit：M JPY）
746

Capital Expenditures
Depreciation

605

416

410
348

354

328

277

348

258

187

191

195

204

1Q

2Q

3Q

4Q

FY20.3

232

1Q

337

253

260

273

280

292

2Q

3Q

4Q

1Q

2Q

FY21.3

373

358
314

299
310

314

318

309

320

3Q

4Q

1Q

2Q

3Q

FY22.3

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

33

Costs・Marginal Profit Ratio

Segment

・Fixed costs are on an increase trend due to system-related depreciation and operational redundancy.

・Marginal profit is expected to remain at a current level.

（Unit：M JPY）
88.6%

88.1%

91.2%
81.1%

85.2%

87.2%

86.5%

84.4%

87.5%

84.6%

87.6%

83.3%

86.9%

87.6%

87.5%

356

361

395

Marginal Profit Ratio
Variable costs
Fixed costs

374
404

238

263

346

308

342

316

412

349

460

193

783

829

862

1Q

2Q

3Q
FY20.3

988

976

1,018

1,042

4Q

1Q

2Q

3Q
FY21.3

1,143

1,093

1,142

1,201

1,241

1,244

1,228

1,243

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

FY22.3

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

34

Segment

Market size and its growth outlook for Settlement business for consumers (toC)

Cashless settlement market is expected to continue to grow at a high rate for both non-face-to-faceand face-to-face settlements.
Continue to promote cashless in this market, expand merchant network assets, and drive Fintech businessPrivate final 305
consumption
expenditure（Unit：T JPY）

289

Government Goals
Ratio of Cashless
Settlements
Up to 80％

Room for Cashless(Cash payment, etc.)

EC Settlement Market
Face-to-Face Cashless
Settlement Market
'18

'19

21

23

27

65

72

79

'20

'21

'22 (Fcst.)

31

36

40

86

92

99

'23 (Fcst.)'24 (Fcst.)'25 (Fcst.)'26 -Estimated by the Company based on the following data
“System of National Accounts for 2021”, Cabinet Office / “Domestic Cashless Settlement Market 2022”, Yano Research Institute / “Cashless Roadmap 2022”, Ministry of Economy, Trade and Industry/ “Results of FY2021 E-Commerce Market Survey Compiled”, Ministry of Economy, Trade and Industry / “Current Status and Outlook of the Internet Settlement Services Market in EC, FY2022
Edition”, Deloitte Tohmatsu MIC Research InstituteCopyright © 2023 Digital Garage, Inc. All Rights Reserved

35

Segment

Segment Overview

Performance

Segment Revenue
Segment Profit before tax

FY22.3 3Q Cum.

FY23.3 3Q Cum.

YoY Inc./Dec.

YoY % Chg.

9,401 M JPY

8,728 M JPY-673 M JPY-7.2%

588 M JPY

728 M JPY

+139 M JPY+23.7%Note) Revenue is external revenue. Profit before tax is before intersegment eliminations.

Major Group Companies /Businesses➤ Marketing Technology Company

Supports client’s business through performance-based ads,
web marketing, CRM marketing, and DX businesses➤ DG Communications Co., Ltd.
Develops real estate advertising business➤ BI.Garage, Inc.

Contextual ads business and media consortium business➤ CyberBuzz, Inc.（20％ stake／equity method）Ticker : 7069

Provides the social media marketing platform structured with influencers
as its center part

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

36Segment Performance（3Q Cumulative）

Segment

・Although revenue decreased due to reduction of less profitable projects, profit before tax turned to plus in 3Q cumulative YoY.
・The digital advertising business in the financial sector performed solidly, where we have a high market share, and profit
increased steadily.

Segment Revenue

Segment Profit before tax（Unit：M JPY）

（Unit：M JPY）

CRM, etc.

Real Estate

11,065
3,132

4,874

3,059

Digital Ads

9,549

9,401

3,196

2,495

3,363

2,990

3,645

3,262

YoY

8,728

-7.2%

2,358

-5.5%

3,132

YoY
-14.1%

3,238

FY20.3 3Q Cum. FY21.3 3Q Cum. FY22.3 3Q Cum. FY23.3 3Q Cum.

-0.7%

1,516

458

588

728

+23.7%

FY20.3 3Q Cum. FY21.3 3Q Cum. FY22.3 3Q Cum. FY23.3 3Q Cum.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved37Quarterly Segment Revenue

Segment

・Digital advertising, the mainstay of the company’s business, performed well and is on track for the full year.
・Real estate advertising business remained sluggish, affected by market conditions due to COVID.
（Unit: M JPY）

CRM etc.
Real Estate
Digital Ads
3,984

4,311

YoY

3,705
3,376
640

1,386

1,747

3,335

1,773

1,572

3,257

1,529

962

1,026

1,071

1,093

1Q

2Q

3Q

4Q

981

877

769

771
1,335

1,470

1,309

1,086

922

967

1,102

1Q

2Q

3Q

968

FY20.3

3,217
2,958

1,105
1,445

3,618

3,499

FY21.3

1,305

3,098
800

1,157

3,087

1,092

926

2,953

-4.3%

728

952

-2.8%

1,163

1,048

920

-22.1%

1,087

1,071

1,081

+10.4%

1Q

2Q

3Q

2,927
678

2,848

1,223
1,182

1,287

1,143

1,141

978

4Q

1Q

2Q

3Q

FY22.3

1,302

4Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved38

Quarterly Advertising Volume

Segment

・Digital ads are recovering from the budgetary austerity of companies placing ads in COVID disaster.
・Expanding business in the financial sector, where MT has a high market share.
Real estate
Smartphone/App
Cosmetics/HR
Financial
8,230
2,250

1,701

1,723

8,519
2,091

2,072

1,810

2,556

2,547

1Q

2Q

（Unit：M JPY）

9,727
8,397
1,918

1,592

1,728
8,259

2,069
7,305
1,321

2,324

1,765

1,275
1,119
1,743

1,768

1,377
1,631

8,440

3,117

3Q

FY20.3

4Q

9,737

1,460

2,009

1,401
1,476

2,106

1,220
1,762

1,622

3,487

3,534

1Q

2Q

3Q

FY21.3

8,296

1,960

1,288

2,344

1,767
812

855
2,411

9,585
8,886

+7.1%

1,238

-29.9%

809

-0.4%

2,303

1,756

-1.9%

4,899

5,083

+29.5%

2Q

3Q

1,499
1,608

883

904
2,039

1,791

2,029

3,167

9,838

9,637

9,003

5,731
4,013

YoY

11,024

Digital Ads

4Q

4,746

4,384

1Q

2Q

3,926

3Q

FY22.3

4,612

4,452

4Q

1Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

39

Segment

Segment Overview

Performance

FY22.3 3Q Cum.

FY23.3 3Q Cum.

YoY Inc./Dec.

YoY % Chg.

66,699 M JPY

72,193 M JPY+5,494 M JPY-

Amount Sold

3,741 M JPY

2,185 M JPY-1,556 M JPY-

Amount Invested

5,805 M JPY

2,255 M JPY-3,550 M JPY-

Operational Investment Securities➤DG Ventures Inc.

Major Group Companies /Businesses

Invests in and incubates cutting-edge internet startups➤Open Network Lab（Program）
Seed Accelerator Program➤ DG Incubation, Inc.

Supports startups that challenge the world
through incubation and fund management➤ DG Daiwa Ventures, Inc.（50％ stake／equity method）
Manages DG Lab Fund to invest in startups
with next-generation technologies➤ Digital Garage US, Inc.
The US-based global strategy headquarters
Copyright © 2023 Digital Garage, Inc. All Rights Reserved40Segment

Segment Performance（End of Dec. 2022）

・ Despite the write-down of Blockstream‘s fair value in 2Q, portfolio was stable.

・The fair value at the end of December was 72.2 B JPY.（-5.8 B JPY vs the end of FY22.3）
Balance of Operational investment securities
by Currency

Portfolio by Region（Unit： JPY）

Others
INR
JPY
USD

66,6995,431
11,43872,193
4,657

0.3%

Others13.8%

14,01443,7801,575

North America

Japan

45.3%

19.9%

10,67949,301

52,633

Asia

20.8%

30,493

FY21.3 3Q

EuropeFY22.3 3Q

FY23.3 3Q
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

41Trends in Fair Value of Investees

Segment

・Built a global portfolio focusing on the U.S., Asia, and Japan. Achieved sustainable growth in fair value through diversificationof investments in each growth stage.
・Mainly due to strong yen in 3Q, the fair value decreased compared to the end of the previous quarter.

（Unit: 100M JPY）

190

219

242

267

278

1Q

2Q

3Q

4Q

1Q

FY19.3

331

351

365

363

2Q

3Q

4Q

1Q

FY20.3

406

438

472

2Q

3Q

4Q

FY21.3

508

1Q

615

2Q

667

3Q

FY22.3

780

4Q

866

1Q

798

722

2Q

3Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

42Segment

Outlook on IT Segment Portfolio

・Mainly due to the write-down of Blockstream‘s fair value in 2Q, the fair value decreased by 7% compared to the end of FY22.3.
・Risks are diversified as the fair value of the top six companies in the overall portfolio decreased.
Trends in Fair value of IT Segment investees

780
150
Top six
Companies

-101

722
49
227

215

（Unit：100 M JPY)
Blockstream
MX Technologies
GrubMarket
Sen Do Technology
Healthians+44
Others

Droom

415

447

End of FY22.3

End of FY23.3 3Q

OthersCopyright © 2023 Digital Garage, Inc. All Rights Reserved

43

Examples of Investments

Segment

・Fintech/DX promising portfolio companies in the With Corona era grew in Asia, Japan, North America, and other areas. Steadyprogress was made in fundraising, listing, and exit of investees.

DG Group's Fintech business collaboration projects

Asia
Droom
[India]Operates Droom, India's largest automotive buying and selling
online marketplace

NoBroker Technologies
Solutions[India]Operates India’s peer-to-peer property marketplace. Users canrent/buy houses online without brokers

Expedient Healthcare
Marketing[India]Operates medical web service “Healthians.com,” which offers
online booking for health checkups at clinics, related informationfrom doctors/experts, etc.

Ralali[Indonesia]

Operates BtoB marketplace for office appliances, etc.

GoTo Group[Indonesia]

Indonesian technology company formed in a merger between ridehailing giant Gojek and e-commerce platform TokopediaJapan
AGE technologies[Japan]A member of the 18th Open Network Lab Seed Accelerator
Program. Provides "Souzoku.com," a service that completes
various procedures occurring at the time of inheritance on theInternet.

North America・Europe
MX Technologies[US]
Offers a PFM (personal financial management) tool for financial
institutions in the US

THIRD[Japan]Helium[US]

Provides cost reduction consulting services for construction,
machinery, and electrical work, and AI-based real estate
management platform “Kanri Roid”

Operates IoT business through smart sensor devices that can beprovided at low cost

Pocket Change[Japan]Blockstream[US]

Provides "pocket change" service for collection, redemption, andexchange of foreign coins, linked to electronic money and point services

Develops Sidechain, a technology for using Blockchain, Bitcoin's
core technology, in various applications

GOYOH[Japan]Pie Systems[Denmark]

Develops and operates IT services for real estate, commercial andresidential properties in Japan and abroad. Develops EaSyGo, a realestate tech service that increases real estate value through stakeholder
ESG behavior change

Develops mobile app that automatizes refund workflow forinternational VAT (Value-Added Tax) and bypasses airport kiosk

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

44

Segment

Segment Overview

Performance

FY22.3 3Q Cum.

FY23.3 3Q Cum.

YoY Inc./Dec.

YoY % Chg.

Segment Revenue

3,434 M JPY

6,575 M JPY+3,142 M JPY+91.5%

Segment Profit before tax

1,891 M JPY

4,837 M JPY+2,946 M JPY+155.8%Note) Revenue is external revenue. Profit before tax is before intersegment eliminations.

➤ Kakaku.com, Inc. （20％ stake／equity method） Ticker : 2371

Major Group Companies /Businesses

Operates purchase support service Kakaku.com, restaurant review andrestaurant service Tabelog, and New Media and Solutions➤ Crypto Garage, Inc.

Promotes development of advanced financial services utilizing blockchain
technology and cryptography technology with Tokyo Tanshi Co., Ltd., and Nomura Holdings, Inc.

➤ Brainscan Technologies, Inc.
MRI business for drivers➤ Musubell business

Develops and provides "Musubell," a system to promote DX of contracting and otheroperations in the real estate industry➤ Academie Du Vin Co., Ltd.

Runs wine school and wine sales business and develops EC business➤ Welby Inc. （19％ stake／equity method ） Ticker : 4438

Develops medical record business, disease solution business, and medical data researchbusiness
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

45

Segment Performance (3Q Cumulative)

Segment

・Due to recovery of restaurant industry caused by normalization of economic and social activities, performance mainly in
Kakaku.com’s Tabelog business grew steadily.
・As profit from the sales of shares of associates was recorded, profit before tax grew by 2.5 times YoY.

Segment Revenue
One-time revenue
Discontinued operation (NCS※)
Other

5,672

Segment Profit before tax（Unit：M JPY）
YoY
6,575 +91.5%

Investment profit on equity method（Unit：M JPY）
YoY
4,837 +155.8%

One-time revenue
Profit before tax excluding
one-time revenue

3,316
3,753
1,189
990
2,795

1,821

+16.6%

3,434
1,162

2,144

1,191

+20.0%+2.5%

2,664 +24.2%

FY20.3 3Q Cum. FY21.3 3Q Cum. FY22.3 3Q Cum. FY23.3 3Q Cum.

1,891
2,675

1,448
1,448

1,764

2,117

FY20.3 3Q Cum. FY21.3 3Q Cum. FY22.3 3Q Cum. FY23.3 3Q Cum.

※Transferred all operations of New Context Services, Inc. in FY21.3.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

46

Quarterly Segment Revenue

Segment

・Although the activity restrictions of the Corona disaster mainly affected investment profit on equity method from Kakaku.com,
core revenue, excluding one-time factors and discontinued operations, has stabilized under the current circumstances.
（Unit：M JPY）
2,232

2,257

642

642

346

382

1,696
345

404

1,744
355

359
403

1,305
312

349
801

289

863

986

906

176

1,103

370

170

127

316

349

994

422

1,146
345

1,246
405

1,181

389

-8.0%

1,040

+5.8%

398

391
984

914
623

2,720

1,406

1,034

444

341
947

One-time revenue
NCS
Other
Investment profit on equity method

2,178

1,647

YoY
4,149 +195.1%

589

558

603

4Q

1Q

2Q

801

841

783

4Q

1Q

2Q

284
1Q

2Q

3Q

FY20.3

4Q

1Q

2Q

3Q

FY21.33Q

FY22.33Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

47

Kakaku.com, Inc. Performance

Segment

Source) “Results Briefing for the Third Quarter of the Fiscal Year ending March 31, 2023”, Kakaku.com,Inc.

Kakaku.com, Inc. Quarterly Revenue by Business
Kakaku.com
Tabelog（Unit：M JPY）
16,023
14,053

13,30912,243

5,933

12,021
6,130

5,474

5,958

5,417

4,187

3,754

5,566

4,957

+16.1%

4,960

-6.8%

6,291

+18.5%

5,070+48.0%

14,225

4,686

5,373

5,448

5,308

4,253

3,685

4,091

1Q

2Q

3,565

1,735
1,809

2,277

2,718

2,991

2,850

3,182

3,426

3,968

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

FY21.314,015

16,321

5,114

7,371
4,493

13,787

11,861
5,320

9,502

YoY

New Media and Solutions/Finance

FY22.33Q

FY23.3Copyright © 2023 Digital Garage, Inc. All Rights Reserved

48

Financial Information

Copyright © 2023 Digital Garage, Inc. All Rights Reserved49Consolidated P/L（IFRS）
FY22.3

FY21.3
JPY in Millions

FY23.3

YoY (3Q)
Increas/Decrease

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

6,944

12,3209,447

11,767

10,84329,266

12,77920,067

17,734-3,1707,769-5,010 -39.2%

6,148

6,301

6,138

6,357

6,004

6,068

6,226

6,532

6,002

6,144

6,362

+137

Revenue in operational investment
securities

302

4,968

2,226

3,535

3,893

9,834

4,378

10,1637,534-7,301-233-4,611 -105.3%

Other income

193

207

214

1,335

326

223

202

202

159

176

2,955

+2,753 +1362.0%

Finance income

1

0

17

40

18

11,382

513

1,247

2,131

-1,090-650-1,163 -226.8%

300

843

853

499

600

1,758

1,461

1,923

1,907

-1,099-665-2,126 -145.5%

6,539

6,689

6,123

6,811

5,969

6,715

6,526

8,352

6,530

14,676

12,986+6,460 +99.0%

2,764

2,829

2,459

2,645

2,531

2,617

2,662

2,703

2,622

2,495

2,421

-241

-9.1%

0

0

0

0

0

0

0

0

0

0

6,009

+6,009

-

3,453

3,588

3,400

4,095

3,304

3,831

3,696

3,988

3,758

4,112

3,992

+296

+8.0%

Other expenses

69

109

69

370

72

117

99

1,594

80

87

96

-3

-2.9%

Finance costs

252

163

195

-299

62

151

69

68

70

7,982

468

+399 +580.7%

Profit before tax

405

5,632

3,324

4,956

4,874

22,551

6,253

11,715

11,204 -17,846-5,216-11,470 -183.4%

Profit attributable to owners of parent

224

3,779

2,290

3,493

3,343

15,152

4,305

7,529

7,467 -11,818-3,611-7,916 -183.9%

Revenue
Revenue in recurring business

Share of profit of investments accounted
for using equity method

Expenses
Cost of sales
Loss on operational investment
securities
Selling, general and administrative
expenses％ Change+2.2%

Copyright © 2023 Digital Garage, Inc. All Rights Reserved50Segment P/L（IFRS）
FY22.3

FY21.3

FY23.3

YoY (3Q)
Increas/Decrease

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

6,944

12,3209,447

11,767

10,84329,266

12,77920,067

17,734-3,1707,769-5,010 -39.2%

Financial Technology

2,340

2,409

2,525

2,392

2,516

2,675

2,814

2,757

2,721

2,898

3,155

+342 +12.1%

Marketing Technology

3,335

3,257

2,958

3,499

3,217

3,098

3,087

3,618

2,927

2,848

2,953

-133

Incubation Technology

389

5,269

2,225

3,599

4,015

12,214

5,008

11,5498,937-8,949-2,226-7,234 -144.4%

Long-term Incubation

801

1,305

1,646

2,179

1,034

994

1,406

1,146

1,246

1,181

4,149

+2,743 +195.1%

Others/Adjustments and Eliminations

79

81

94

97

61

10,286

465

996

1,903

-1,147-263-728 -156.6%

405

5,632

3,324

4,956

4,874

22,551

6,253

11,715

11,204 -17,846-5,216-11,470 -183.4%

Financial Technology

1,018

1,083

1,141

875

1,108

1,120

1,264

1,057

1,121

1,309

1,517

+254 +20.1%

Marketing Technology

178

78

202

276

248

183

158

435

101

272

355

+197 +125.2%

Incubation Technology

72

4,916

1,861

3,415

3,636

11,886

4,593

11,1008,480-9,443-8,780-13,373 -291.1%

Long-term Incubation

120

485

843

1,205

574

504

813

-639

684

609

3,545

+2,732 +336.0%

Others/Adjustments and Eliminations

-983

-931

-724

-815

-692

8,858

-575

-237

818 -10,593-1,854-1,279JPY in Millions

Revenue

Profit before tax％ Change-4.3%

Copyright © 2023 Digital Garage, Inc. All Rights Reserved-51

Consolidated BS（IFRS）
JPY in Millions

End of
FY22.3End of
FY22.12

Increas/Decrease

Current assets

147,642

163,035+15,393

43,41568,906+25,491

Cash and cash equivalents

Reason for change / Remarks

Trade and other receivables

24,462

19,762-4,700

FT business-related items

Operational investment securities

77,95072,193-5,756

Change in fair value of investee companies

83,96571,323-12,642

Non-current assets
Property, plant and equipment

18,423

17,178-1,244

Intangible assets

4,194

4,477

+284

Investments accounted for using equity method

27,80826,098-1,711Other financial assets

23,317

13,102-10,215

Total assets

231,607234,358+2,751

Current liabilities

59,242

109,517+50,276

Bonds and borrowings

9,223

41,258+32,035

Trade and other payables
Non-current liabilities

43,90075,14962,503+18,603

41,622-33,526

Bonds and borrowings

40,71014,654-26,055

Other financial liabilities

10,683

9,528-1,155

Deferred tax liabilities

22,001-6,314+16,749

Total liabilities

134,390

15,687
151,140

Total equity attributable to owners of parent

95,73881,149-14,589

Share capital

7,692

7,825

+133

Capital surplus

6,147

6,230

+83

Treasury shares-1,409-6,177-4,767

Other components of equity

2,273

1,448

-825

Retained earnings
Non-controlling interests

81,035
1,479

71,823
2,070-9,213+591

Total equity

97,217

83,219-13,998

Decrease in fair value of investee companies

Transfer CB to short-term borrowings

Transfer CB from long-term to short-term borrowings

Copyright © 2023 Digital Garage, Inc. All Rights Reserved52

Datasheet

Starting this fiscal year, the information previously disclosed in the“Supplementary Explanatory Material" section will be posted as adatasheet at the Company's website.
URL: https://www.garage.co.jp/en/ir/library/
We continue to enhance information disclosure to provide
information that contributes to investment decisions by ourshareholders and investors.

Copyright © 2023 Digital Garage, Inc. All Rights Reserved53Supplementary Materials

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

54

SegmentIndustry structure of credit card transactions
Contract

Brand membership contract

International brands

VISA/MASTER/AMEX/DINERS/JCB
Pay feeIssue credit cards

Acquirer

Pay feeAcquire and manage merchants
Representative
contract

Purchase goods & services

Payment
agencycontract

DirectPay on behalf（fee deducted））
fee deducted

Payment Service
Provider（Merchant contract）
contract

Pay on behalf（fee cost
deducted）（
Payment

Credit card Payment

Credit card contract

Credit card member
Consumer

Pay fee
Payment

IssuerMoney

Brand membershipcontract

Merchant

E-commerce & In-store businesses

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

55

Segment

Business model：Payment Service Provider

A service that acts as an intermediary between e-commerce site operators and face-to-face merchants and payment service
providers such as credit card companies and convenience stores, enabling the introduction of a number of payment methods,
including credit card payments, through a single contract and system.
Electronic message
Money

Consumer

Payment service
providerMerchant

Payment
networks
Credit card companies①Order⑦Offergoods

EC website

Real stores②Settlement
information③Settlement
information⑤ Notify
result④Notify
result⑨Pay theamount lessthe settlement
agent's fees

⑧Pay sales
proceeds
less fees

Bank Payment
Convenience stores Payment
E-money Payment
Telecom Carriers Payment
ID Payment
International Payment
QR Code Payment
BNPL (Buy Now Pay Later)⑥Payment
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

56

Segment

Business model：Contract type

Storage agency type (Representative contract)
Acting as an all-in-one agent for contracting
procedures with various settlement institutions andpayment of sales amounts• Single point of contact for payment• Streamline operations such as payment management andconfirmation

Payment service
providerPayment dataprocessing

Payment dataprocessing

Monthly fee
Pay the amountless thesettlement
agent's fees

Pay sales
proceeds lessfees

Payment
institutions• Monthly sales proceeds are deposited to the merchant in a lump-sum
payment from our company

Merchant• We handle all contracting procedures with payment providers such as
credit card companies and financial institutions

Merchant
contract

Payment data processing type (Direct contract)• Merchants sign contracts directly with credit card companies• Provide the necessary software and transaction management tools• Also provide support for software installation

Electronic
message
Money

Payment service
providerPayment dataprocessing
Monthly fee,
Processing fee

Payment dataprocessing

Merchant contract

Pay sales proceeds less fees

Payment institutions• Provide payment systems and automate card payment processing

Dataprocessing
contract

Merchant

Based on the merchant agreements with credit cardcompanies signed by the merchants, credit card
payment processing is automated through theintroduction of a payment system provided by PSP

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

57

Business Model：Cash flow and Posting of revenue

Segment■Cash flow

The settlement agent business (The Company) credits the payment made by purchasers received through credit
card companies, convenience stores, etc. to the merchant stores of e-commerce businesses and storefront
businesses that are its customers.

Customer

Payment forthepurchase

Payment
institutions

Pay the amount lessthe settlement
agent's fee

Pay the purchaseprice less fees

Credit card company,
Convenient store etc.

①

Fee②

Fee③

Merchant

E-commerce&
In-storebusinesses■Posting of revenue
Under IFRS, fees received by the Company are directly recognized as revenue.
Revenue
J-GAAP

Total fees received from
customers ①

COGS

－

Pay fees to settlement
institution ②

Gross Profit
Settlement agency fees
＝ received
by the Company③

Revenue
IFRS

Settlement agency fees
received by the Company③
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

58

Segment

Business Model: Marketing Business・Supporting client business growth through a comprehensive digital marketing service
・Providing solutions utilizing CRM and data, and Fintech solutions which connect with the paymentbusiness
Promoting interest and purchase intent
in all touchpoints with consumers

Clients

Marketing business

Bank/Card
Securities/Payment/Other
financial services

Outsource

RetailOthers (HR/Public
transportation/Hotels/
Travel, etc.)

Customer databasedevelopment and analysis
Application
development

App/Game/E-book/Contents services
Real estate developer

Consumer

Overall internet advertising(Purchase promotion/customer
attraction/brand recognition)

Cosmetic/Consumer goods
manufacturer
E-commerce

Contact points

Work
togetherin DX area

Web media

SNS

Search engine

App

Mass media

Store

Media
development

AI solutions

Competing platforms for GAFA

Joint projects in DX and IT

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

59Market size：Internet advertising market

Segment

・ Internet advertising expenditures surpassed four Traditional media advertising expenditures for the first time, driving therecovery of Japan’s overall advertising market
・The Internet advertising market is expected to continue to expand in the future.

Trends in Four Traditional media and Internet advertising expenditures
35,000（Unit：100 M JPY）

TelevisionNewspapers
Magazines

30,00027,052

RadioInternet

25,00021,04820,00022,29017,58915,09415,00013,10010,000

5,000

3,777

4,826

6,003

6,983

7,069

2008

2009

7,747

8,062

2010

2011

8,680

9,381

10,51911,594

0
2005

2006

2007

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Source : "Advertising Expenditures in Japan in 2021", Dentsu Inc.
Copyright © 2023 Digital Garage, Inc. All Rights Reserved

60

Segment

Global Incubation Stream

・Maximize the global network that DG has built to date to discover and nurture world-class startups.
Global Incubation Stream

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

61

Segment

Accelerator Program ”Open Network Lab”

・Developing support programs with different characteristics in line with each stage and area tofurther strengthen support for startups and realize social implementation.
Total Startups

152 startups
Funding Success Rate

58.1 %
Exited Companies

12.5 %

Copyright © 2023 Digital Garage, Inc. All Rights Reserved

62

Please note that the business forecasts and strategies covered in today’s presentation are based on our current evaluation and future results may vary significantly depending on unforeseeable
events or circumstances. This announcement is solely for the purpose of the investors relationship and is not for making any solicitation for investment in any securities. This announcement does
not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior toregistration or qualification under the securities laws of any such jurisdiction. Any securities of our consolidated subsidiaries have not been registered under the U.S. Securities Act of 1933, as
amended (the "U.S. Securities Act") and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act.
Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer andits management and financial statements.